The total purchases in Q1 2021 for major iBuyers, such as Zillow, Opnedoor, Redfin and Offerpad, are finally rising to the levels of the same period last year, after taking a hit during the pandemic, especially at the beginning of it.
RedfinNow was launched in Seattle and San Francisco in December and expanded it to Phoenix in January, making $39.4 million revenue in Q4 2020, over $60 million less than the previous year, same quarter. Rob Hahn, managing partner at real estate consultancy 7DS Associates says “What we see from Q4 2020 results is that iBuying is starting to take off, even in the hottest seller’s market in history”. According to a Zillow analysis, the U.S. housing market gained almost $2.5 trillion in value last year, the most since 2005.
Zillow Offers brought $304 million in revenue in Q4 which is down 50% from the previous year and Offerpad just announced a SPAC deal, co-led by Spencer Rascoff, former Zillow CEO, planning to operate in 19 markets this year and move into about 50 markets in the next three years.
The pandemic has stimulated the use of digital in real estate, such as virtual tours and this may be an important tool in the future of iBuying. “The world is going to one click — why not real estate?” said Rich Barton, CEO of Zillow. “That’s where we’re headed.”